** LEGAL UPDATE **
When you put your home on the market, you probably have a price you hope to receive. Your real estate agent, if any, will have also helped you assess the market value of your house, based on comparable sales in your area.
Of course, the price at which you and your agent decide to list the home's is only a starting point for negotiations. Actual buyer interest, plus level of competition among those making offers, will determine the actual selling price.
Still, the last word in the matter of home value is often that of the home appraiser. Most buyers take out a mortgage in order to buy the home, and the mortgage lender routinely demands that an appraisal report be prepared. How else would the lender know that the property is truly valuable enough to be sold in foreclosure (if need be) and cover the amount of the loan?
If the appraisal report comes in low, the lender will balk, and the buyer might have to come up with a higher down payment. Or, the buyer might ask you to reduce the selling price. Deals can fall apart at this point.
That's why it's somewhat disturbing to hear the news of a recent survey; the December Quicken Loans National Home Price Perception Index (HPPI); which found that professional home appraisers valued U.S. homes, on average, at 0.45% below what the homeowners were expecting.
It's not a huge percentage, but on a $650,000 home, it could make for a nearly $3,000 difference. Negotiations have fallen apart over smaller amounts.
Effective Date: January 11, 2019